Varin's Indian rope trick

So farewell to Corus, owner of flagship steelmaker British Steel. One can understand why Philippe Varin and the management were so enthusiastic about this deal at the original offer price of 455p, and now at a price one-third higher at 608p.

He and his colleagues will be joining the rich lists for selling off a prized European manufacturer though at least they are taking some of the workers - who bought in at a lowly 17p - with them.

But you have to question the judgment of a board which was willing to throw in the towel with an agreed bid at a much lower price.

The majority of investors have to be grateful that Standard Life had the guts to hold firm, while more supine shareholders were willing to give in.

Tata has mortgaged itself to the hilt to do this deal. Details of the financing have not been fully disclosed but we know that under the terms of the original transaction it was borrowing at least £3.3bn.

It is not surprising that Tata shares have tanked and rival CSN's have soared given the scale of the risk at a time when interest rates across the globe are on a rising trajectory.

In a deal such as this it is only too easy to focus on the finances and forget the industrial logic.

The reason why emerging market economies from Russia to India are swallowing their Western counterparts is because they can produce steel at a fraction of the cost in their own factories.

So it is puzzling that Varin is promising that steel jobs in Britain will be safe. There must also be a worry that the research and development skills will be lost to India over the fullness of time.

This is one of the simplest of ways for the new owners to deliver on cost reductions. The result will be that the alarming de-industrialisation of Britain will gather pace.

The best thing likely to emerge from Tata's strike against the former empire is that India will start to fulfil its commitment to open up its capital markets.

This will be vitally important for a resurgent Vodafone as it manoeuvres into poll position to grab control of Indian mobile giant Hutchison Essar.

Bad Friends

The 51% ownership of Foreign & Colonial by insurer Friends Provident has long been a curiosity. But never before can it have seemed quite such an anvil around the insurer's head.

While Friends is putting on sales at a healthy clip, the fund management arm F&C is watching mandates walk out the door with funds under management dropping 20% to £104bn in the year.

Friends and the independent financial advisers who sell its products-cannot look on this with any equanimity.

Whereas F&C clients have the ability to switch out if they are disappointed by performance, holders of Friends investment products often have no such choice.

They can find themselves locked into longer-term investment products in which the fund management skills are provided by F&C.

It may well be that the exit of funds from F&C is a temporary phenomena as the merger between the old ISIS (formerly Ivory & Sime) and F&C enterprises settles down. But that is to put the kindest gloss on events.

What is disturbing is that Friends Provident and F&C, both corporate governance mavens, sanctioned huge payouts to former F&C executives in the wake of the merger.

In the light of the very moderate performance since, such payments, including an estimated £13m to former chief executive Bob Jenkins, look wholly inappropriate.

The best way forward now for Friends is to bring F&C in house, where it can exercise tighter discipline, or even better to float off its stake.

Then there will be no potential conflict of interest between being a major shareholder in F&C and allowing it to manage investment funds.

Living on a different planet to F&C is John Duffield's New Star which put on a sufficiently confident performance to be able to return £300m to shareholders.

Pity though Duffield didn't keep the cash in the war chest for when he finally strikes back against his former German masters at Jupiter.

Sky high

If James Murdoch is fearful of the slew of regulatory inquiries into BSkyB's £940m land grab at ITV, he is not showing it.

He sounds confident that Michael Grade will bring ITV's share price back above the 135p Murdoch paid by leveraging its historic strengths in both content and advertising.

Even if the regulators were to order Sky to disgorge some of the ITV stock, Murdoch will have achieved his objective of catching Sir Richard Branson off balance at a time when he was trying to promote the fourplay of Virgin cable, mobile, broadband and landlines.